By Noel Randewich
– Retail investors appeared to be enthusiastically buying the dip in Wall Street’s biggest growth companies on Thursday as the U.S. stock market plunged following Facebook owner Meta Platforms Inc’s disappointing quarterly report.
Investors on Fidelity’s online trading platform placed four buy orders for every sell order, with the social media company topping the list of most-traded stocks.
Meta’s stock slumped 25% after the social media heavyweight gave a dismal forecast late on Wednesday, blaming Apple’s privacy changes and increased competition.
That plunge erased over $200 billion of Meta’s stock market value, and also sparked drops in other growth stocks that have soared in recent years, with the Nasdaq down 2.6% at midday on Thursday.
It also unleashed a rush of trading in Meta’s options, with some traders betting on a quick rebound in the stock, data from Trade Alert showed. Retail investors have accounted for a growing part of overall options trading volume in the past few years.
Fidelity showed its customers placing more than two Amazon.com Inc share purchase orders for every sell order as the online retailer’s stock dropped nearly 7% ahead of its quarterly report after the bell.
As music streaming service Spotify Technology dropped 16% after its disappointing report on Wednesday, Fidelity showed customers placing 2.5 buy orders for every sell order.
In several U.S. stock market selloffs in recent years, retail investors have reliably bought more of their favorite growth stocks, even as institutional investors shifted into less volatile companies with lower valuations.
When the S&P 500 dropped to its most recent closing low on Jan. 27 amid worries about rising interest rates, retail investors were net buyers, snapping up $1.4 billion worth of U.S. stocks, according to data from Vanda Track.
On Reddit’s wallstreetbets stock trading forum, positive sentiment for Meta beat negative by about 1.4 to 1 during the past 24 hours, according to swaggystocks.com.
(Reporting by Noel Randewich in Oakland, Calif.; Additional reporting by Saqib Ahmed in New York; Editing by Matthew Lewis)